Trader’s Psychology Vs. The Numbers

Trader’s Psychology Vs. The Numbers

For the past two weeks, I’ve been focused on my psychology and not so much on the numbers. By the numbers, I mean how much money I am losing or making at a given time – these two weeks have had ABSOLUTELY NOTHING to do with money.

I will be honest, not having money as a driving factor has been so beneficial, and I will go into those reasons later on, but for now, let’s dive deeper into the psychology journey that I have been on.

We have often spoken about psychology, what to focus on, and the different ways to spot where you are mentally.

These two weeks, I’ve focused on processes and systems – Building a psychological framework because when you have the framework set, you can surf the waves and climb the mountains you may face.

I decided to build a psychological framework after reading a quote by James Clear (author of Atomic Habits).

Systems are for people who care about winning repeatedly. Goals are for people who care about winning once.”

As investors, Forex traders, and other market participants, we are not looking for once-off wins but repeated wins, CONSISTENCY!

This means we need to have systems in place that allow us to operate at our peak without clouded judgment due to psychological difficulties.

We understand that when you are going through things in your life, these things can affect you psychologically, which translates into the way you perceive the markets in that week. How dangerous is that? – Think about it!

Let me bring it home for you. Have you ever gone through the whole trading week and looked back on the trades you took, missed, won, and lost and could not believe that it was you who saw the markets that week?

You begin questioning whether you were okay or why you didn’t see opportunities that presented themselves as clear as day? – It’s psychological! You probably had a lot going on mentally in that week. You were on the charts, but you were not there mentally.

In this case, it is crucial to take a step back. Look at what caused the disconnect between your perspective and execution.

Stop looking at the money

Going back to the benefits of not having money as the driving factor in your trading. Suppose your trading is all about money. In that case, you will not obtain the money or not to the level you could because you won’t be focused on little improvements daily but rather “where could I make the next $100” and that thinking will more likely leave you disappointed in the results because you may not get that $100.

It is very important to focus on your psychology going into the markets, week in and week out, because your perspective, focus, and intentions are much clearer.

I realized that PERCENTAGE wise I was making so much more when I focused on my STATE OF MIND going in and coming out of the markets CONSISTENTLY. Now, this is interesting because it reverse-engineered the end result!

If the end result was to be consistently profitable and extract value from the markets through my efforts, I was able to do that by not focusing on money but rather the elements that contribute to it significantly.

Focus more on where you are, allow the systems you have to work effectively for your good, and watch as you become a better trader!

Happy Trading Fellow Traders!

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Emmanuel Maphosa

Emmanuel Maphosa

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